Despite significant layoffs at major tech companies like Microsoft, Amazon, and Google, IT departments across the broader business world are seeing growth in both budgets and hiring.

According to Avasant Research’s latest IT Spending and Staffing Benchmarks 2024/2025 report, CIOs are focusing on leveraging emerging technologies, such as AI and automation, to drive enterprise transformation and productivity. While economic pressures remain, IT operational budgets are still on the rise, with many organizations prioritizing investments in AI, network infrastructure, and data analytics.

As CIOs take on more strategic roles, they are pushing to capitalize on technological advances that directly impact business performance. AI, in particular, has moved beyond the hype phase and is now a key tool for innovation across multiple sectors, providing tangible benefits for customer engagement, decision-making, and operational efficiency.

Why It Matters: The sustained growth in IT budgets and hiring reflects the importance of technology as a driver of business success, even in uncertain economic conditions. Despite headline-grabbing layoffs in the tech sector, CIOs are doubling down on investments in technologies like AI, aiming for greater operational efficiency and competitive edge.

• IT Budgets Continue to Grow: According to Avasant Research, IT operational budgets will increase by 3.0% in 2024. While this represents a smaller growth rate compared to the previous two years, companies are still prioritizing spending on key technologies that drive innovation.

• AI and Automation Lead Investments: Over 68% of surveyed companies reported increasing their spending on AI, with none indicating a decrease. AI, especially generative AI, is being recognized as a critical asset for improving both operational and financial outcomes across industries.

• Strategic Focus on Infrastructure: Along with AI, CIOs are focusing investments on network infrastructure and data analytics to support their digital transformation efforts. Data center automation is also gaining momentum, enabling better productivity through enhanced access to large datasets.

• Metaverse Revival: Despite waning public interest, 37% of companies have increased spending in metaverse technologies, driven by AI-powered customer experiences. The convergence of AI, AR/VR, and immersive technology is boosting engagement and driving tailored interactions for sophisticated customers.

• CIOs at the Helm of Enterprise Transformation: With IT playing a pivotal role in customer experience, decision-making, and productivity, CIOs are positioned to make a substantial impact on their organizations. The report suggests that economic pressures have only accelerated the need for digital innovation.

Go Deeper -> IT Budgets and Hiring on the Rise Despite High-Profile Layoffs – Avasant